Shire to buy NPS in $5.2 billion deal

The Ireland-domiciled group is paying $46.00 per share in cash, representing a 51% premium to NPS’ unaffected share price of $30.47 on December 16 last year and 9.8% up on its closing price on January 9. The likelihood of a deal had been growing since the beginning of last week when it was revealed that NPS had engaged Goldman Sachs to contact potential buyers.

For its money, Shire will get hold of Gattex/Revestive (teduglutide) for short bowel syndrome which generated sales of $67.9 million in the first nine months of 2014. The purchase also includes Natpara/Natpar (recombinant human parathyroid hormone) for the treatment of hypoparathyroidism; a decision about approval from the US Food and Drug Administration is expected by the end of this month; it is also under review in Europe.

Chief executive Flemming Ornskov says the acquisition “is a significant step in advancing Shire's strategy to become a leading biotechnology company”. He added that “with our global strength and expertise in both rare diseases and GI, Shire is uniquely positioned to drive the continued success” of Gattex and, if approved, Natpara.

His counterpart at NPS, Francois Nader, said the transaction “will accelerate our ambition of creating a world where every person living with a rare disease has a therapy”.

UPDATE: Ana Nicholls, healthcare analyst at The Economist Intelligence Unit, noted that Shire had already said it was on the lookout for more acquisitions after AbbVie withdrew from its takeover in October. She added that the purchase of NPS “follows a familiar pattern for Shire, of buying in promising products to expand its existing portfolio of treatments for rare diseases and then working to maximise sales”.

Ms Nicholls went on to say that regulators and payors “are trying to rein in the soaring costs associated with orphan drugs, but even so the revenues from both drugs are likely to be substantial. The acquisition therefore gets Shire closer to its aim of doubling revenues to $10 billion a year by 2020”.